Optimizely, a leading website testing service, secures $28 million in funding from Benchmark Capital to fuel global expansion plans.
Optimizely, a Y Combinator-incubated startup that helps companies A/B test different versions of their websites, has raised $28 million in Series A funding. This significant investment will enable Optimizely to expand its operations and pursue ambitious goals.
A Big Step for Optimizely
The $28 million Series A funding is a substantial amount, especially considering the company’s previous rounds had only raised a total of $3.2 million. However, according to Co-founder and CEO Dan Siroker, this investment will allow Optimizely to grow rapidly.
Revenue Growth
Siroker revealed that despite the relatively small amount of funding, the company has reached an annualized revenue run rate in "the double-digit millions." Furthermore, he stated that revenue is growing by 400 percent per year. These impressive numbers demonstrate Optimizely’s potential for growth and its ability to expand its customer base.
High-Profile Customers
Optimizely has already signed up some high-profile customers, including the Obama and Romney 2012 presidential campaigns. Siroker’s connection to these campaigns is not coincidental; he was Obama’s director of analytics in 2008. This experience likely contributed to his ability to secure such prominent clients.
Competitive Advantage
Optimizely’s growth can be seen by comparing it with competing products among the top 10,000 Alexa websites (using data from BuiltWith). The chart sent by Siroker demonstrates Optimizely’s increasing market share and its competitive edge in the industry.
Series A Funding Led by Benchmark
The Series A funding was led by Benchmark, with participation from Bain Capital Ventures and Optimizely’s existing investors Battery Ventures, InterWest Partners, and Google Ventures. Peter Fenton, a partner at Benchmark, is joining Optimizely’s board of directors. This move marks the first time an outside member has joined the board, which until now consisted solely of Siroker and his co-founder Pete Koomen.
Auditioning VCs
To find the right investors, Optimizely conducted a unique process – holding "mock board meetings" with potential investors. This creative approach allowed them to assess their potential partners’ qualifications and fit for the company’s growth strategy.
Ambitious Plans
Siroker stated that despite going into the funding round knowing it was possible they might not spend all the money, the investment gave Optimizely an opportunity to be "really ambitious" on several fronts. The company plans to:
- Expand Internationally: Optimizely has already opened its first European office in Amsterdam and will launch in nine languages representing 36 countries over the next quarter.
- New San Francisco Office: The company is moving into a new 56,000 square foot office in San Francisco, which has room for more than 450 employees. However, Siroker hopes to outgrow this space eventually.
Investing in Key Areas
Optimizely will also be investing in:
- Sales and Marketing: To further expand its customer base.
- Infrastructure and Customer Support: To ensure the company’s rapid growth doesn’t compromise its services.
Vision for Future Growth
The big vision here, as Siroker has mentioned before, is to expand Optimizely beyond testing and turning it into a platform that allows websites to personalize themselves for every visitor. This ambitious goal includes:
- Personalization: Enabling businesses to show exactly the right thing to the right person at the right time.
Conclusion
Optimizely’s $28 million Series A funding is a significant milestone for the company, allowing it to pursue its ambitious growth strategy and expand into new areas. With its strong revenue growth, high-profile customers, and competitive edge in the industry, Optimizely is well-positioned for future success.
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